The Democratic Progressive Party (DPP) won a historic third consecutive term in Taiwan's 2024 presidential elections—much to the dismay of China’s President Xi Jinping, who hopes to unify Taiwan with the Chinese mainland under the governance of the Chinese Communist Party (CCP). With this loss, moving forward, China largely has three options: first, it can continue its current military and economic measures against Taiwan; second, it can launch a complete invasion against the country; or third, it can attempt to coexist peacefully with Taiwan.
The first of these three options seems the most futile. In the past, China has performed military procedures in Taiwan’s vicinity, sent fighter jets and rockets near and over the country, and suspended tariff concessions on some of Taiwan’s exports, all in an effort to coerce the country into accepting CCP rule. In the days leading up to the election, China threatened to further raise tariffs and even launched a satellite over Taiwan’s airspace. However, though this year’s victory was tighter than those in the past, the DPP prevailed despite these various coercive measures. Furthermore, this election’s closeness in large part had to do with voter dissatisfaction with DPP’s handling of Taiwan’s economy rather than China’s pressures. Therefore, China’s actions have done little to sway the Taiwanese people and are unlikely to do so in the future. Whether President Xi Jinping understands this is unclear, but what is clear is that the Taiwanese are unlikely to be threatened into acceding sovereignty, which means such measures are not going to get President Xi Jinping what he wants.
The second option, a Chinese invasion of Taiwan, is the most destructive, but what is surprising—and very concerning—is how much and to whom. An invasion of Taiwan would launch a war between the U.S. (Taiwan’s ally) and China and by Bloomberg’s estimates would cost the global economy $10 trillion, which amounts to roughly 10% of global GDP. Taiwan supplies a majority of the world’s semiconductors and lagging edge chips. According to Bloomberg, Taiwan’s contribution of these products makes up 5.6% or $6 trillion of global GDP, while the market cap of the top 20 customers of its largest chip company, Taiwan Semiconductor Manufacturing Co., is around $7.4 trillion. In the case of a war, assuming China’s other trade partners cut off trade, China’s GDP would fall by 16.7%. Meanwhile, the U.S. GDP would suffer by 6.7%. Needless to say, a Chinese invasion of Taiwan is far from a rational move for China, though considering U.S.-China tensions and the recent election results, the chances of it occurring are not zero.
The final option—peaceful coexistence—unfortunately, seems the most unlikely. China has been vehement in its assertion that Taiwan is its own, and Jinping’s sustained efforts against Taiwan despite the lack of results do not, I believe, suggest hope for a peaceful future but demonstrate his relentless intent. It is improbable that China will adopt its ongoing economic and military coercion against Taiwan as a long-term policy in light of its futility, but it is just as improbable that China will simply give up. Concerningly, this leaves an escalation of the conflict as the only probable option. However, China is not blind to the catastrophic consequences such a move would result in, especially for itself. This is why experts believe there is a very low risk that China will actually invade Taiwan. And yet, if there is anything the war in Ukraine and the conflict in the Middle East have taught us, it is how easily sustained tensions can erupt into full-scale war. Therefore, one cannot say with certainty how the conflict over Taiwan will unfold—the best we can do is stay vigilant and ensure we are prepared for every outcome.
The opinions expressed in this piece are those of the individual author.
Sources
Blanchard, Ben, and Liz Lee. “China Piles Pressure on Taiwan Ahead of Election.” Reuters, Reuters, 9 Jan. 2024, www.reuters.com/world/asia-pacific/taiwan-ruling-party-candidate-will-maintain-status-quo-engage-with-china-2024-01-09/.
Ellis, Samson, and Cindy Wang. “Xi Has Few Good Options after Winnable Taiwan Vote Slips Away.” Bloomberg.Com, Bloomberg, 14 Jan. 2024, www.bloomberg.com/news/articles/2024-01-14/xi-s-taiwan-strategy-in-tatters-after-winnable-vote-slips-away.
Welch, Jennifer, et al. “If China Invades Taiwan, It Would Cost World Economy $10 Trillion.” Bloomberg.Com, Bloomberg, 9 Jan. 2024, www.bloomberg.com/news/features/2024-01-09/if-china-invades-taiwan-it-would-cost-world-economy-10-trillion.